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From pasture to policy: Does LPI guarantee a set price?

December 10, 2025

Join the LPI team as we dispel common myths and answer important questions about the Livestock Price Insurance (LPI) program.

Myth: Livestock Price Insurance guarantees you a set price at auction.

LPI is not individualized production insurance meaning cattle policies are not settled against the exact price a producer may receive at auction. Instead, LPI provides protection against market declines, giving producers the flexibility to sell when conditions are right.

Join Courtney as she dispels the myth that LPI guarantees a set auction price.

 

Understanding coverage

Producers pay a premium to receive forward price coverage. By purchasing this coverage, they establish a floor price within the market.

In final four weeks of the policy, producers have the option to settle. A claim can be made if the market falls below the insured index (coverage price) during the claim window. When a claim is settled, LPI pays the difference between the insured index and the settlement index (market price).

If the market is above the insured index (coverage price) purchased, producers can benefit by selling livestock into the higher regional market.

Settlement values reflect weekly market conditions and are determined using data collected from various auction markets across western Canada. Once data is collected, it is sorted to be representative of the two regions (AB and SaskMan).

LPI covers declining price movements but does not limit the upwards price movement potential. It is designed to help manage market risk while giving producers peace of mind.

To learn more, download the LPI Program Guide.